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12 Steps to Financial Wellness Step 8: Know When & How to Indulge

Living a life of financial wellness means being happy with a lifestyle that’s within your means, but doesn’t leave you feeling like you’re lacking. At the same time, financial wellness means discipline governs money choices and not by emotion. So how do you balance the two?

Here’s how to indulge responsibly.
 

Live with a Budget
To do this, track your spending for three months. Next, make a list of all your expenses and list your income in a parallel column. Tally up your totals and assign a realistic dollar amount to each expense. From now on, be sure to only spend within the allocated amount for each expense category.
 

Leave Room in Your Budget for “Just for Fun” Purchases
As you work on building a budget, leave room for the occasional treat. The exact amount will vary by income level, lifestyle, and personal choice. However, wisely choose an amount you can easily afford without feeling deprived. 


Review Your Savings
Before giving yourself permission to indulge, make sure you’re setting aside some of your monthly income to savings. Ideally, short-term savings should be enough to keep you afloat for 3-6 months if you have no source of income. Long-term savings should support your retirement and any long-term savings goal you may have. 


Choose Your “Treats”
Everyone’s got a personal vice or three. Look at where your non-discretionary money went over the last month and highlight the more expensive impulse buys. Hold these purchases up to these questions:

  • Did this purchase bring me happiness or positive energy the day I bought it? How long did that feeling last?
  • Did this impulse buy blow my budget?
  • Does thinking about this purchase now fill me with joy, guilt or something else?
  • Use the insight about your indulgences to help you make better money choices in the future. 

Lose the Guilt
Once you’ve decided how much you want to spend each month on indulgences, it’s time to let go of guilt. If you’re spending responsibly, there’s no need to eat yourself up over an impulse buy you could have done without. As long as you’re keeping these just-for-fun purchases within your budget, you can maintain your financial wellness.

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